RBI withdraws Chapter IIIB exemptions from Housing Finance Companies

RBI withdraws Chapter IIIB exemptions from Housing Finance Companies

RBI withdraws exemptions from Housing Finance Companies

Housing Finance Institutions (HFIs) as defined under Clause (d) of Section 2 of the National Housing Bank Act, 1987. Such HFIs  are currently exempt from the provisions of Chapter IIIB of Reserve Bank of India Act, 1934.

Chapter IIIB contains provisions relating to Non-Banking Institutions receiving deposits and Financial Institutions receiving deposits and financial institutions.

Under Chapter IIIB, exemption was granted to a Non-Banking institution which is authorized to operate a payment system and to issue prepaid payment instruments under the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).

The exemption was limited and restricted to money received by such non-banking institution for issue of prepaid payment instruments.

RBI, has now decided to withdraw these exemptions and make the provisions of Chapter IIIB except Section 45-IA of Reserve Bank of India Act, 1934, applicable to HFIs.

Read Revised Master Direction – Exemptions from the provisions of RBI Act, 1934